Global business strategy
Like other research-based pharmaceutical companies, Daiichi Sankyo is engaged in high-risk/high-return research and development investments. But the growth rates of the pharmaceutical markets in industrialised countries are low.
For this reason, companies focusing exclusively on the traditional research-and-development-oriented pharmaceutical business in industrialised countries may find it difficult to cope with ongoing developments.
To master the challenges posed by the changing economic environment and the increasing restraints on public spending, Daiichi Sankyo has developed its "Hybrid Business Model". It is based on four pillars: innovative pharmaceuticals, established pharmaceuticals, vaccines and over-the-counter (otc) products.
Daiichi Sankyo's hybrid business model
To establish an enhanced global presence that also covers newly industrialised countries and emerging markets and to extend the product portfolio with highest quality generic medicines, Daiichi Sankyo acquired a majority stake in India's largest pharmaceutical manufacturer, Ranbaxy, in 2008.
This was the first time that a research-based pharmaceutical company had acquired a generic manufacturer from an emerging market. As a result, this step constitutes an evolution in the current business models of the global pharmaceutical industry and clearly demonstrates that innovation plays a key role in the business processes at Daiichi Sankyo - and not just in the company's medical research.
Ranbaxy's product portfolio comprises a number of well-established, generic products. Ranbaxy also has an extensive network and marketing capabilities in newly industrialised and developing countries. These qualities ideally complement Daiichi Sankyo's portfolio and extend the Group's direct presence to more than 50 countries worldwide.
This geographical reach allows the Group to fulfil the medical needs of people in both industrialised countries and emerging markets by giving them access to innovative medicines. The partnership with Ranbaxy also serves as an excellent opportunity for Daiichi Sankyo to promote its products in countries.